Bank of America's first-quarter earnings may not blow investors away, but they may be the best of what is likely to be a lackluster bank earnings season.
Amid the gloom, both Goldman’s Richard Ramsden and Deutsche Bank’s Matt O’Connor cited Bank of America’s stock as a top pick and expect it to rise on the back of its first-quarter earnings. Messers. Ramsden and O’Connor mostly like Bank of America’s stock because it has been battered this year, falling nearly 14% in 2015 compared to the KBW Bank Index, which has dropped 4%. The S&P 500, by contrast, is basically flat this year.
Still, O’Connor sees some other reasons to buy Bank of America’s stock: 'BAC remains the best large bank play on a stronger US economy/higher rates and has good leverage to rising capital markets revenue (including FICC). BAC has also made good progress reducing legacy mortgage costs (with more to come) and core expenses'.
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